http://www.businessweek.com/articles/2013-04-22/how-did-the-worlds-rich-get-that-way-luck
This article addresses the commonly asked question,
how did the rich become rich? As we have seen before, much of the commentary
suggests that if your parents are wealthy, you are likely to also become
wealthy. Economists Samuel Bowles and Herbert Gintis concluded that in the
U.S., about 50 percent of variation of wealth and about 35 percent to 43 percent
of variation in income of children could be explained by the relative wealth
and income of their parents. The vast majority of the article supports this
premise and did not interest me, but there is one sentence that caught my
attention. Linda Loury a professor of economics at Tufts estimates that half of
all jobs in the U.S. are found through family, friends, or acquaintances. Gone
are the days of simply submitting your resume to employers. Now it seems you
must know someone on the inside, “it’s not the grades you make, but the hands
you shake.”
4 comments:
Pretty depressing article. I think one of America's historically greatest strengths was the seeming ability of anyone who wanted to increase their social or economic position could do so if they were willing to work very hard. If the economic classes of our society are becoming more rigid than it may be that we need to rethink our educational system and our society in general and try to provide more opportunities to lower income individuals.
I would be interested to see data on other countries. Without another country to look at I don't know how relatively high or low these percentages are. I suspect the percentage of all jobs found through family or friends in the U.S. is higher than in other nations, but how much higher?
I also think this might be the consequence of many more people getting college degrees than in the past. With college degrees much more accessible and resumes looking more and more alike, you need a way to put your foot in the door.
Aspiring to rise high in businesses myself, I have done a good amount of research into how successful people get that way. What I have found is it DOES lie on the basis of talent somewhat, no matter who you know if you can't do the job they won't hire you, or if they do, they wont keep you. However, it is definitely not always the most qualified candidate that gets hired for a given position, it matters what you bring to the table. Some people bring diversity, some people bring connections, etc. In the case of "hiring somebody you know", it's the same idea of an arms length economy. Because you know them, you can make certain assumptions about them and can hold them responsible at more then just a professional level, but also at a personal one.
So much for the argument of a meritocratic society leading to wealth. I also think this view regarding nepotism helps arguments against meritocracies, which suggests that despite equal effort and opportunities, networking skills may aid a person in getting a particular job.
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